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Genpact Reports Full Year and Fourth Quarter 2019 Results

2019 Revenues of $3.52 billion , Up 17% (18% on a constant currency basis)(1)

2019 Global Client BPO Revenues of $2.64 Billion , Up 13% (14% on a constant currency basis)(1)

2019 Diluted EPS of $1.56 , Up 8%; 2019 Adjusted Diluted EPS(2) of $2.05 , Up 14%

NEW YORK , Feb. 6, 2020 /PRNewswire/ -- Genpact Limited (NYSE: G), a global professional services firm focused on delivering digital transformation, today announced financial results for the fourth quarter and full year ended December 31, 2019 .

New Genpact logo - September 2017 (PRNewsfoto/Genpact)

"Outstanding execution and continued Transformation Services wins capped off one of our best revenue growth years ever. This translated into healthy adjusted diluted EPS and operating cash flow growth for 2019.  These metrics were all above the high end of our expectations," said "Tiger" Tyagarajan, Genpact's president and CEO.  "Clients' desire for transformational change is accelerating, expanding our addressable market and providing greater opportunities for us to drive profitable long-term growth. We continue to improve the rigor and agility of our portfolio evaluation process, allowing us to quickly reallocate investment and talent resources to best penetrate high growth areas."

Key Financial Results Full Year 2019

  • Total revenue was $3.52 billion , up 17% year-over-year (18% on a constant currency basis). 1
  • Net income attributable to Genpact Limited shareholders was $305 million , up 8% year-over-year, with a corresponding margin of 8.7%. 
  • Income from operations was $429 million , up 23% year-over-year, with a corresponding margin of 12.2%.   Adjusted income from operations was $559 million , up 18% year-over-year, with a corresponding margin of 15.9%. 3
  • Diluted earnings per share was $1.56 , up 8% year-over-year, and adjusted diluted earnings per share 2 was $2.05 , up 14% year-over-year. 
  • New bookings were approximately $3.9 billion , consistent with 2018. 4
  • Cash generated from operations was $428 million , compared to $340 million in 2018.

Key Financial Results Fourth Quarter 2019

  • Total revenue was $941 million , up 13% year-over-year both on an as reported and constant currency basis. 1
  • Net income attributable to Genpact Limited shareholders was $82 million , up 4% year-over-year, with a corresponding margin of 8.7%.  
  • Income from operations was $120 million , up 8% year-over-year, with a corresponding margin of 12.7%.  Adjusted income from operations was $159 million , up 12% year-over-year, with a corresponding margin of 16.9%. 3
  • Diluted earnings per share was $0.42 , up 2% year-over-year, and adjusted diluted earnings per share 2 was $0.57 , up 10% year-over-year.

Revenue Details Full Year 2019

Total Company

  • Total BPO revenue was $2.97 billion , up 19% year-over-year, representing 84% of total revenue.
  • Total IT revenue was $546 million , up 10% year-over-year, representing 16% of total revenue.

Global Clients

  • Revenue from Global Clients was $3.04 billion , 5  up 11% year-over-year (12% on a constant currency basis), 1 representing 86% of total revenue.
  • Global Client BPO revenue was $2.64 billion , up 13% year-over-year (14% on a constant currency basis). 1
  • Global Client IT revenue was $400 million , up 3% year-over-year.

GE

  • Revenue from GE was $478 million 5 , up 78% year-over-year, representing 14% of total revenue.
  • GE BPO revenue was $332 million , up 110% year-over-year.
  • GE IT revenue was $146 million , up 32% year-over-year.

Revenue Details Fourth Quarter 2019

Total Company

  • Total BPO revenue was $801 million , up 14% year-over-year, representing 85% of total revenue.
  • Total IT revenue was $140 million , up 3% year-over-year, representing 15% of total revenue.

Global Clients

  • Revenue from Global Clients was $811 million 5 , up 7% year-over-year (8% on a constant currency basis), 1 representing 86% of total revenue.
  • Global Client BPO revenue was $711 million , up 9% year-over-year (10% on a constant currency basis). 1
  • Global Client IT revenue was $100 million , down 4% year-over-year.

GE

  • Revenue from GE was $129 million 5 , up 61% year-over-year, representing 14% of total revenue.
  • GE BPO revenue was $90 million , up 81% year-over-year.
  • GE IT revenue was $40 million , up 29% year-over-year.

2020 Outlook

Genpact expects:

  • Total revenue for the full year of $3.89 to $3.95 billion , up 10.5% to 12.5% both on an as reported and constant currency basis. 1    
  • Global Client revenue growth in the range of 12% to 14% both on an as reported and constant currency basis. 1
  • Adjusted income from operations margin 6 of approximately 16.0%.
  • Adjusted diluted EPS 7 of $2.24 to $2.28 .         

Conference Call to Discuss Financial Results

Genpact's management will host an hour-long conference call beginning at 4:30 p.m. ET on February 6, 2020 to discuss the company's performance for the fourth quarter and full year ended December 31, 2019 . To participate, callers can dial +1 (877) 654-0173 from within the U.S. or +1 (281) 973-6289 from any other country. Callers will be prompted to enter the conference ID, 7297984.

A live webcast of the call will also be made available on the Genpact Investor Relations website at https://www.genpact.com/investors . For those who cannot join the call live, a replay will be archived on the Genpact website after the end of the call. A transcript of the call will also be made available on the website.

About Genpact

Genpact (NYSE: G) is a global professional services firm that makes business transformation real. We drive digital-led innovation and digitally-enabled intelligent operations for our clients, guided by our experience running thousands of processes primarily for Global Fortune 500 companies. We think with design, dream in digital, and solve problems with data and analytics.  Combining our expertise in end-to-end operations and our AI-based platform, Genpact Cora, we focus on the details all 90,000+ of us. From New York to New Delhi and more than 30 countries in between, we connect every dot, reimagine every process, and reinvent companies' ways of working. We know that reimagining each step from start to finish creates better business outcomes. Whatever it is, we'll be there with you accelerating digital transformation to create bold, lasting results because transformation happens here.

Safe Harbor

This press release contains certain statements concerning our future growth prospects and financial results and other forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties, and other factors include but are not limited to a slowdown in the economies and sectors in which our clients operate, a slowdown in the business process outsourcing or information technology services sectors, our ability to develop and successfully execute our business strategies, the risks and uncertainties arising from our past and future acquisitions, our ability to convert bookings to revenues, our ability to manage growth, factors which may impact our cost advantage, wage increases, changes in tax rates and tax legislation and other laws and regulations, our ability to attract and retain skilled professionals, risks and uncertainties regarding fluctuations in our earnings, foreign currency fluctuations, general economic conditions affecting our industry, political, economic or business conditions in countries in which we operate, including the uncertainty relating to the withdrawal of the United Kingdom from the European Union, commonly known as Brexit, as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These filings are available at www.sec.gov . Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes that these forward-looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management's current analysis of future events and should not be relied upon as representing management's expectations or beliefs as of any date subsequent to the time they are made. Genpact undertakes no obligation to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.

Contacts

Investors


Roger Sachs, CFA



+1 (203) 808-6725



roger.sachs@genpact.com



Media


Michael Schneider

+1 (217) 260-5041

michael.schneider@genpact.com

 

 

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share data and share count)




As   of   December   31,



As   of   December   31,




2018



2019


Assets









Current assets









Cash and cash equivalents


$

368,396



$

467,096


Accounts receivable, net



774,184




914,255


Prepaid expenses and other current assets



212,477




170,325


Total current assets


$

1,355,057



$

1,551,676


Property, plant and equipment, net



212,715




254,035


Operating lease right-of-use assets





330,854


Deferred tax assets



74,566




89,715


Investment in equity affiliates


836




Intangible assets, net



177,087




230,861


Goodwill



1,393,832




1,574,466


Contract cost assets



160,193




205,498


Other assets



155,159




217,079


Total assets


$

3,529,445



$

4,454,184


Liabilities and equity









Current liabilities









Short-term borrowings



295,000




70,000


Current portion of long-term debt



33,483




33,509


Accounts payable



42,584




21,981


Income taxes payable



33,895




43,186


Accrued expenses and other current liabilities



571,350




683,871


Operating leases liability





57,664


Total current liabilities


$

976,312



$

910,211


Long-term debt, less current portion



975,645




1,339,796


Operating leases liability





302,100


Deferred tax liabilities



8,080




3,990


Other liabilities



165,226




208,916


Total liabilities


$

2,125,263



$

2,765,013


Shareholders' equity









Preferred shares, $0.01 par value, 250,000,000 authorized, none issued







Common shares, $0.01 par value, 500,000,000 authorized, 189,346,101 and
190,118,181 issued and outstanding as of December 31, 2018 and
December 31, 2019, respectively



1,888




1,896


Additional paid-in capital



1,471,301




1,570,575


Retained earnings



438,453




648,656


Accumulated other comprehensive income (loss)


(507,460)



(531,956)


Total equity


$

1,404,182



$

1,689,171


Total liabilities and equity


$

3,529,445



$

4,454,184


 

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)




Three months ended December 31,




2017 8



2018



2019


Net revenues


$

734,413



$

835,339



$

940,739


Cost of revenue



454,803




533,134




630,648


Gross profit


$

279,610



$

302,205



$

310,091


Operating expenses:













Selling, general and administrative expenses



188,817




178,580




212,650


Amortization of acquired intangible assets



10,632




9,716




9,047


Other operating (income) expense, net



6,856




3,068




(31,124)


Income from operations


$

73,305



$

110,841



$

119,518


Foreign exchange gains (losses), net



(49)




186




4,083


Interest income (expense), net



(7,668)




(9,473)




(9,971)


Other income (expense), net



15,971




5,078




719


Income before equity-method investment activity, net and income tax expense


$

81,559



$

106,632



$

114,349


Equity-method investment activity, net



24




10





Income before income tax expense


$

81,583



$

106,642



$

114,349


Income tax expense



15,445




27,495




32,151


Net income


$

66,138



$

79,147



$

82,198


Net loss attributable to redeemable non-controlling interest



944








Net income attributable to Genpact Limited shareholders


$

67,082



$

79,147



$

82,198


Net income available to Genpact Limited common shareholders


$

67,082



$

79,147



$

82,198


Earnings per common share attributable to Genpact Limited
common shareholders













Basic


$

0.35



$

0.42



$

0.43


Diluted


$

0.34



$

0.41



$

0.42


Weighted average number of common shares used in computing
earnings per common share attributable to Genpact Limited
common shareholders













Basic



192,795,534




189,724,744




190,083,647


Diluted



196,862,168




193,149,836




196,592,325


 

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)




Three months ended December 31,




2017 9



2018



2019


Net revenues


$

2,736,929



$

3,000,790



$

3,520,543


Cost of revenue



1,681,438




1,921,768




2,294,688


Gross profit


$

1,055,491



$

1,079,022



$

1,225,855


Operating expenses:













Selling, general and administrative expenses



689,461




693,865




794,901


Amortization of acquired intangible assets



36,412




38,850




32,612


Other operating (income) expense, net



(1,661)




(1,845)




(31,034)


Income from operations


$

331,279



$

348,152



$

429,376


Foreign exchange gains (losses), net



1,996




15,239




7,729


Interest income (expense), net



(31,735)




(37,119)




(43,458)


Other income (expense), net



23,586




35,761




5,786


Income before equity-method investment activity, net and income tax expense


$

325,126



$

362,033



$

399,433


Equity-method investment activity, net



(4,543)




(12)




(16)


Income before income tax expense


$

320,583



$

362,021



$

399,417


Income tax expense



59,742




80,763




94,536


Net income


$

260,841



$

281,258



$

304,881


Net loss attributable to redeemable non-controlling interest



2,270




761





Net income attributable to Genpact Limited shareholders


$

263,111



$

282,019



$

304,881


Net income available to Genpact Limited common shareholders


$

263,111



$

282,019



$

304,881


Earnings per common share attributable to Genpact Limited
common shareholders













Basic


$

1.36



$

1.48



$

1.60


Diluted


$

1.34



$

1.45



$

1.56


Weighted average number of common shares used in computing
earnings per common share attributable to Genpact Limited
common shareholders













Basic



193,864,755




190,674,740




190,074,475


Diluted



197,049,552




193,980,038




195,160,855


 

 

...

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)




Year ended December 31,




2017



2018



2019


Operating activities













Net income attributable to Genpact Limited shareholders


$

263,111



$

282,019



$

304,881


Net (loss) attributable to redeemable non-controlling interest



(2,270)




(761)





Net income


$

260,841



$

281,258



$

304,881


Adjustments to reconcile net income to net cash provided by operating activities:













Depreciation and amortization



58,503




64,868




96,101


Amortization of debt issuance costs (including loss on extinguishment of debt)



1,884




3,975




1,779


Amortization of acquired intangible assets



36,412




38,850




32,612


Write-down of intangible assets and property, plant and equipment



9,311




4,265




3,511


Reserve for doubtful receivables



9,819




1,857




7,443


Unrealized loss (gain) on revaluation of foreign currency asset/liability



(11,830)




3,352




(5,171)


Equity-method investment activity, net



4,543




12




16


Stock-based compensation expense



35,685




48,998




83,885


Deferred tax expense (benefit)



(10,391)




6,054




(16,315)


Loss (gain) on divestiture



5,668








Gain on exchange of non-monetary asset



(4,100)